Altaba Inc. (formerly Yahoo) Message Board

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Technology Stocks : Altaba Inc. (formerly Yahoo)

AABA 19.63

0.0%

Nov 6 4:00 PM EST

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To: the Druid who wrote (1791)	10/6/1997 8:45:00 PM
From: Mark L.	of 27307

"Long term I see a lot of potential for Yahoo!. I would like to learn other shorters' opinion about Yahoo!" I have always thought that Yahoo! was a fine product, a terrific brand name, and a very well managed company. Whether they make their next numbers or not, I certainly think they will soon become a profitable company. The chief objection is valuation. It seems to have no relationship to any conceivable projection of the future. The fundamental business has a low barrier to entry. Either the search engine/Internet-commerce business is not going to amount to much (in which case Yahoo! is way overpriced), or it is going to be quite profitable (in which case it will invite significant competitors with a lot more resources than Yahoo!--for example, Microsoft or Netscape or the Baby Bells or a spinoff from one of the larger ad agencies or their clients). This is not to say that Yahoo! can be trounced easily. They have a lot of money and are well-connected to even more (Softbank). Nor would Microsoft's entry into the market mean certain doom: look at the Microsoft Network vs. AOL. However, if the search engine business is a worthwhile business, then I would expect significant new competitors and significant marketing spending from the current crop (it's not as if Excite and Lycos are without capital and strategic partners). However, if you are strictly a momentum investor, I don't see why Yahoo! would not continue to go up. Its revenues are growing by leaps and bounds, and it will soon turn profitable. I think the view of realistic shorts is that they really cannot predict when the stock will come more into line with the real world; they're just expecting that it will at some point. The stock may very well go to 200 before it goes to 10. After all, the arguments I mentioned above were just as valid 40 points ago.

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